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AN NBER PUBLICATION ISSUE: No. 12, December 2020

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Mechanical downloads of corporate 10-K and 10-Q filings increased from 360,861 in 2003 to around 165 million in 2016. Companies have long seen annual reports and other corporate disclosures as opportunities to portray their business health in a positive light. Increasingly, the audience for these disclosures is not just humans, but also machine readers that process the information as an input to investment recommendations. In How to Talk When a Machine Is...

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Americans spent $6 billion more on at-home power consumption from April to July 2020 than during normal times, nearly offsetting a decline in business and industrial demand. With Zoom sessions, greater use of heating and cooling systems, and lamps and printers running all day, Americans working from home, combined with an increase in the number of unemployed workers who are home because they have lost jobs at shuttered businesses, have driven a surge in...
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Debt backed by the value of the firm as a going concern, rather than asset-based debt, features prominently in corporate capital structures. Roughly three-quarters of noninvestment-grade firms in nonfinancial industries carry debt that exceeds the estimated liquidation value of their property, plant, equipment, and working capital. This suggests that a substantial amount of corporate debt takes the form of cash flow-based lending, where creditors have payoffs...
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Over six decades, the International Finance Corporation has earned higher returns than the S&P 500 on its equity portfolio. The oldest and most diversified international impact investor has earned superior returns by deploying its funds in emerging-market and developing nations, according to findings reported in Long-Run Returns to Impact Investing in Emerging Markets and Developing Economies (NBER Working Paper 27870). Over six decades, the International...
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Residents of gang-controlled neighborhoods in San Salvador have worse dwelling conditions, less income, and lower probability of working in a large firm than those living just outside gang territory. How do armed, nonstate actors such as criminal organizations affect economic growth? Nikita Melnikov, Carlos Schmidt-Padilla, and Maria Micaela Sviatschi explore this question in Gangs, Labor Mobility, and Development (NBER Working Paper 27832), a study of how two of...
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Subsidiaries of parent firms that have other subsidiaries in a country experiencing a downturn invest less than subsidiaries of parents with no link to countries in recession. Nonfinancial multinational companies (MNCs) propagate economic downturns from one country to another through the network of their subsidiaries, according to an analysis of the experiences of more than 1,000 MNCs with over 10,000 subsidiaries in 23 countries during the 2008–12 period. In...
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